$860 million HUD services deal draws protest

The Housing and Urban Development Department's incumbent IT services vendor, Lockheed Martin Corp., is fighting the award of the follow-on contract to EDS Corp.

The protest, filed Sept. 9 with the General Accounting Office, contends that HUD miscalculated Lockheed's bid for the HUD IT Services contract.

'There are some specific areas that were misevaluated [and] we don't think they included information we provided in our firm-fixed price,' Lockheed Martin spokeswoman Nettie Johnson said.

HUD is proceeding with work on the pact, following the lifting of a stop work order it had issued immediately after learning of the protest.

The department awarded EDS the 10-year deal last month (Click for Aug. 25 GCN coverage). Lockheed Martin had been providing IT support to the department under the HUD Integrated Information Processing Service contract since 1990.

Lockheed Martin first filed a protest Aug. 22, immediately after HUD announced its choice of EDS. But Johnson said GAO rejected the filing because the department had not yet held a debriefing.

HUD debriefed the company Sept. 4, but department officials would not allow Lockheed Martin representatives to ask any questions during the meeting, Johnson said. HUD agreed to accept questions in writing submitted within 24 hours, she said. Lockheed Martin received the answers Sept. 9 and filed the protest the same day.

The EDS bid was significantly higher than that of Lockheed Martin, but HUD officials did not identify any technical advantages in the winning proposal, Johnson said.

The stop-work order was mandatory under the Competition in Contracting Act, HUD spokesman Michael Fluharty said. 'When a protest comes in, the agency that issued the award has to honor that protest,' he said. 'But there's also a provision in the act where an internal review ' can take place, and if it's demonstrated to the satisfaction of senior officers, the stop-work order can be lifted.'

Fluharty said that Lockheed Martin has appealed HUD's removal of the stop-work order to GAO. The department has until Oct. 9 to file its response to the original protest.

'We're pleased with the decision to rescind the stop-work order, so we can go back to work,' EDS spokesman Kevin Clarke said. 'We believe that the procurement process was sound, and that the HUD decision will' be upheld.